India Is One of the Least E-Commerce Friendly Markets Says U.N. Body

India is one of the fastest growing e-commerce markets in the world, but the country’s online retailing infrastructure is struggling to keep up.

 

According to a new index compiled by the United Nations, India lags way behind many other economies of the world, including Brazil, China and Sri Lanka, in terms of its ability to serve online customers.

 

The U.N. Conference on Trade and Development  business-to-consumer e-commerce index shows that India last year came 83rd out of 130 countries in the ranking that measures the number of Internet users, the availability of secure server infrastructure, credit card penetration and postal delivery.

 

Luxembourg, Norway and Finland came out top as the most e-commerce ready markets in the world in that order.

 

India scored 40.6 on the index compared to Luxembourg’s 91.7.  On Monday, The Wall Street Journal published a front-page story about the men who deliver the goods to India’s swelling numbers of online consumers in bulging backpacks.

 

While almost all of India has access to postal delivery at home — a big plus in e-commerce economics — the report stated that India remains predominantly a cash-based economy and the vast majority (80%) of all online transactions are paid for in cash upon delivery of the item.

 

Only 1.8% of over 15 year olds have access to a credit card and there were 48 secure servers for a million users in 2013.

 

Online retailing accounted for a major share of e-commerce in most markets such as the U.S., Brazil, U.K., Germany and Russia, according to the study. However, in India almost three-fourths of online sales were travel-related, it said.

 

The U.N report says assessing e-commerce readiness can serve as a first step towards formulating a national e-commerce strategy.

 

“As the digital economy expands and more business activities are affected, it becomes more important for governments to consider policies that can help to harness e-commerce for sustainable development,” UNCTAD Secretary-General Mukhisa Kituyi said in a statement.

 

With more than 300 million Internet users last year, India is the world’s second-largest Internet market after China. The number of Internet users is expected to more than double in the next five years as the number of smartphone users grows in tandem.

 

India doesn’t allow foreign companies to sell multiple brands online. But foreign companies can operate marketplace technology platforms where multiple sellers can list their wares to sell.

Source : http://blogs.wsj.com/